Menu cost

The effect is based on the idea that frequent price changes for frequent reprinting of menus perform in the catering industry. In general, all costs are added to the menu costs ( price adjustment costs ) incurred by a price adjustment, for example, the costs incurred by printing new price lists or brochures, but also the cost of deciding on new prices.

With the growth of electronic commerce, the price adjustment costs have fallen since the electronic price lists can be adapted quickly without much effort.

As a result, caused companies with high price adjustment cost disadvantages, as they rarely adjust their prices: Directly after a price increase, which is intended for a longer period, the goods of the company are relatively more expensive than those of competitors.

Normally price adjustment costs are relatively low, in times of unexpected inflation, they are to pay more attention. During hyperinflations have to change their prices daily or even more often to keep up with all the other prices in the economy, step companies. At the time of the Great Depression they got so strong that at times it was no more price lists in German restaurants. Instead, every half hour presented a waiter on a table to announce the price increases.

Swell

Economics

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